The $100k AI Mistake Most Founders Make (and How to Avoid It)

YG3 (AI Business Tools, Miami, FL)

It's no surprise that smart founders are investing in AI. But many are making a $100k mistake.

The mistake? Overpaying for AI tools because they don't know any better.

Here's how to avoid it.

Mistake #1: Not Knowing the Cost of Your AI Tools

Most founders have no idea what their AI tools really cost them.

• They don't factor in software, hardware, and salary costs for employees who train and maintain the models.
• They don't consider the opportunity cost of time spent on manual tasks that could be automated by AI.

The result? They overpay by tens or hundreds of thousands of dollars a year.

"We were paying our data scientist $200k a year to train and maintain our models," said Jane, CEO of XYZ. "But we didn't factor in the $150k it cost us for the hardware and software they needed to do their job. Plus, we lost out on at least another $50k in revenue because we were still doing manual tasks that could have been automated by AI."

"If we'd known the real cost of our AI tools, we would have saved hundreds of thousands of dollars a year and seen much faster growth."

Mistake #2: Not Understanding How AI Tools Work (and Don't Work)

Most founders don't understand the ins and outs of their AI tools.

• They don't know how to evaluate the accuracy, precision, and recall of their models.
• They don't understand how to prevent overfitting, underfitting, and other common problems that can wreck a model.

The result? They end up with models that are less accurate than they could be, or that break down when faced with real-world data.

"We were so excited about our new AI tool that we didn't bother to evaluate its accuracy," said John, CTO of ABC. "But when we launched the product, it turned out that our model was only 80% accurate, not the 95% we had hoped for. We lost a lot of customers because they couldn't trust our recommendations."

"If we'd understood how to evaluate and improve our model, we would have saved thousands of customers and millions of dollars in revenue.

Mistake #3: Not Building AI into Their Company Culture

Most founders don't build AI